New York City Freelance Worker Law Takes Effect

New York City Freelance Worker Law Takes Effect

Posted By
Mahir Nisar Attorney at Law

Wage hour cases are an everyday occurrence in New York. An employer fails to pay
the agreed-upon wage or legally mandated overtime, and the employee sues
to enforce his or her rights under the law. What about freelance workers
who are not technically classified as “employees”? What rights
do they have when a business fails to pay them on time?

What Does the Law Require?

Last year, New York City became the first municipality in the country to
adopt a law specifically targeting freelance worker rights. The “Freelance Isn't Free Act” took effect on May 15 and applies to any private party that hires
a freelancer in New York City. For purposes of the Act, a freelance worker
is any self-employed individual retained to work as an “independent
contractor,” except for sales representatives, attorneys, and medical
professionals.

The Act requires a “hiring party” to sign a written contract
with any freelance worker when the value of the services rendered is at
least $800. This can be for a single project or a series of jobs with
the same freelance worker over a period of 120 days. This requirement
only applies to new freelance worker agreements made after May 15, 2017;
the law is not retroactive.

The contract itself must specify:

The services that the freelance worker will provide;

The rate and method of compensation; and

The date on which payment is required, or the mechanism for determining
such a date; if no date is specified, the Act requires the hiring party
to make payment in full no more than 30 days after completion of a project.

The Act also prohibits an employer from seeking a reduction in compensation
after the freelance worker has already “commenced performance”
on a project.

What Happens if a Business Does Not Comply?

If a hiring party violates any provision of the Act–i.e., fails to
make a written contract or pay a freelance worker on time, the affected
freelancer can either sue in civil court or file a complaint with the
Office of Labor Policy & Standards (OLPS), which is part of the New
York City Department of Consumer Affairs. The benefit to filing a OLPS
complaint first is that if the hiring party does not respond to the city's
investigation, that creates a “rebuttable presumption” in
favor of the freelance worker in court. In simpler terms, the burden of
proof shifts to the hiring party to prove it did not violate the Act.

If a judge determines a hiring party has violated the Act, it may award
damages as follows:

If the hiring party failed to enter into a written contract, but did not
otherwise violate the law, it must pay the freelance worker $250;

If there was no written contract and the hiring party committed any other
violation of the Act, it must pay the freelance worker damages equal to
the value of the agreement.

If the hiring party fails to pay the freelance worker on time, it must
pay double the amount owed in damages; and

If the hiring party engages in any “retaliation” against the
freelance worker for exercising his or her rights under the Act, it must
pay damages equal to the value of the contract for each separate act of
retaliation.

Want to Know How Employment Laws Affect Your Rights?

Given the new and unique nature of New York City's law, it will take
some time for courts and businesses to figure out its application. If
you make some or all of your income from freelance work, you may have
questions about how this will affect your business. If you need assistance
from an experienced
New York employment law attorney on this or any other matter, contact the Law Offices of Mahir S. Nisar
in New York City today.